Federal File: The student lobby?

Backers of President Clinton's direct student-loan proposal last
week accused the Student Loan Marketing Association and other
private-sector participants in the federal loan program of using
unprincipled tactics in their effort to derail the plan.

At a news conference last week, supporters of the plan--which would
eventually replace the current guaranteed-loan system with one in which
the government lends money to students through their colleges--claimed
that their foes are using students as "front men.''

The event, arranged by the Education Department and Sen. Paul Simon,
D-Ill., featured testimony by a college student, a higher-education
lobbyist, members of Congress, and Deputy Secretary of Education
Madeleine M. Kunin.

Robert Kraig, a University of Wisconsin student, said Sallie Mae
flew him to Washington and asked him to organize a student group on his
campus that would support the current system.

"It's very suspicious to have a major loan purchaser pay to have
students come out to Washington,'' said Mr. Kraig, who said he
accompanied another student who had arranged the trip.

A Sallie Mae spokeswoman said its officials simply expressed their
views to the students.

"We didn't ask them to go out and lobby or form an organization,''
she said. "They called and wanted information, so we agreed to talk to
them.''

Sallie Mae flew the students to Washington after first offering to
fly agency officials to Wisconsin, she said.

The direct-loan backers also criticized the efforts of the Student Loan
Funding Corporation of Ohio, which has placed ads in Ohio student
newspapers urging students to write their elected officials in
opposition to the direct-loan proposal.

The plan's backers alleged that the company created a student
organization called Ohio Students for Loan Reform to promote the
current system.

Mark Weadick, the senior vice president of the Ohio guarantor, said
that, while his company has provided financial support to the student
group, it did not create the ads. Students for Loan Reform, he said, is
composed of 10 student-government presidents from Ohio colleges.

The student-loan industry has also engaged in other forms of
persuasive activity, and has reportedly enlisted the aid of some of
Washington's most powerful lobbying firms.

Senator Simon suggested the creation of the alleged front groups
marks a new low. "I can't remember [lobbyists] creating a sham
organization--the Cigarette Lovers of America or Students for
Cigarettes,'' he said.--M.P.

Vol. 12, Issue 36

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